Autonomous cars seen to drive chip sales

Two big chipmakers headquartered in Europe are focusing on driverless cars as a potential revenue booster in the near future, Bloomberg reported.

Infineon Technologies, maker of sensors that include those used in autonomous driving, sees growth in chip sales despite weak total vehicle purchases, CEO Reinhard Ploss was quoted by Bloomberg as saying at an event in Barcelona. STMicroelectronics, for its part, also expects strong growth in demand for futuristic cars – more automated and connects wirelessly – according to CEO Carlo Bozotti, who spoke at the same event.

Ploss said that semiconductors used in the car are increasing and customers are not that bothered to pay more for additional features. In addition, he said the company is focusing on technology and solutions that make the car "like a driving robot."

Several carmakers such as BMW, Tesla Motors and Daimler are upgrading their luxury models by packing them with technology. According to Bloomberg Intelligence, some $333 worth of chip content is loaded in an average car as of 2014. The dollar content is even higher in hybrid and electric cars, as well as in higher-end models including the Mercedes S-Class compared with smaller budget units.

In January, Infineon bought International Rectifier for $3 billion in cash to reposition itself as a comprehensive provider in the market for silicon-, silicon-carbide- and gallium-nitride-based power devices and integrated circuits.

The merger will prove particularly effective in the power semiconductor segment, complementing Infineon's range of high-voltage, high-power semiconductors with International Rectifier's low-voltage, low-power chips, according to an Infineon spokesperson. Currently, the company is collaborating with Google in developing a radar sensor chip that may be used in car safety applications.

Bozotti, on the other hand, said STMicro is focusing on cars to offset declining sales in other segments such as smartphone components. The company has a 70-per cent market share in products that make vehicles "smart."